Cloud Computing: Risks vs Benefits – Part 2

Cloud Computing: Risks vs Benefits – Part 2

In Part 1 of this two-part article, I discussed the context in which, in spite of some drawbacks, cloud computing made sense in the long run (See: Cloud Computing: Risks vs Benefits – Part 1). In the second and concluding part, I carry this argument further and talk about some opposing points of view.

I would like to introduce the concept of BATNA at this point. BATNA, or the best alternative to a negotiated agreement, is a concept in negotiation theory that defines the course of action that will be taken by a party if the current negotiations fail and an agreement cannot be reached. According to this theory, an agreement makes sense as long as it’s better than the next-best alternative. Extending this to the field of computing, going on the cloud makes sense as long as it’s better than the next-best alternative of sticking with traditional IT infrastructure.

Now, in order for a proper assessment, it is necessary to determine what the next-best alternative offers. Other than the obvious advantage of a mature technology that people understand, cloud computing is better on the parameters of costs (See: How Cloud Computing Can Save You Money), scalability (See: Zynga, the Latest Cloud Computing Success) and disaster recovery (See: Earthquakes and Cloud Computing). Even on the issue of security on which cloud computing is pilloried, it can offer distinct advantages that a CD of confidential information that can be misplaced (and has been) cannot (See: Is Cloud Computing Secure? Yes, Another Perspective).

On that note, here’s what MacDonnell Ulsch, CEO and Chief Risk Analyst of the Boston, MA-based ZeroPoint Risk Research, LLC, and keynote speaker the recent Federal Financial Institutions Examination Council (FFIEC) Information Technology Conference held in Washington, DC, had to say about the possible pitfalls of going on to the cloud: “Technology innovation is in part what makes America great, and it is a clear demonstration that the U.S. is a technology leader. But we often fail to reasonably assess the regulatory and other risks associated with new technologies and applications. Failing to meet the mandatory minimum requirements associated with data security and privacy regulations could lay a foundation for other highly impactful risk.”

While some impressive figures of half a billion electronic records in the United States having been compromised over the last six years were mentioned, not all were on the cloud; even if a large part were, it has to be weighed against the billions of dollars businesses are saving and will continue to save due to cloud computing. That is why not only businesses (See: Cars on the Cloud: Microsoft and Toyota Join Hands in Cloud Computing Space ), but traditionally security-paranoid institutions like financial institutions (See: What NYSE’s Adoption of Cloud Computing Means for the Industry ) and the US military have started to embrace the technology (See: US Military Asks for Private Sector’s Help to Understand Cloud Computing).

That is why former federal Chief Information Officer Vivek Kundra, who recently left office, has termed security and privacy concerns as “unfounded and ridiculous” excuses used by federal agencies to avoid adopting cloud computing. In his opinion, the BATNA of “IT cartels” that would “bid for government contracts and their expertise wasn’t superior technology or innovation” but “a PhD in understanding how to navigate the complicated procurement process” was not feasible.

We cannot continue on that path in this tough fiscal environment that we’re in. That is why as part of the administration we instituted a ‘cloud first’ policy, recognizing that some of the most major innovation is not happening within the old model of what I call the ‘IT cartel’ where people continue to win this contract and their objective is essentially to put in as many people as possible and bill at exorbitant rates.” He said.

In conclusion, yes, problems exist, and perhaps, will continue to exist for some more years; but, cloud computing is the future, and the earlier businesses understand that, the more they will benefit.

By Sourya Biswas

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